ITM 501 Chapter Notes -Decision Analysis, Decision Table, Weighted Arithmetic Mean

• School: Ryerson University
• Department: Information Technology Management
• Course: ITM 501
• Professor: Selcuk Savas

Document Summary

Decision analysis: an analytic and systematic approach to the study of decision making. A good decision is based on logic, considers all possible decision alternatives, examines all available info about the future, and applies the decision modeling approach. A bad decision that is not based on logic, does not use all available info, does not consider all alternatives, and does not employ appropriate decision modeling techniques. 5 steps of decision making: clearly define the problem at hand, list all possible decision alternatives. Identify the possible future outcomes for each decision alternative. Identify the payoff (usually profit or cost) for each combination of alternatives and outcomes: select one of the decision analysis modeling techniques discussed in this chapter. Apply the decision model, and make your decision. Decision alternative: a course of action that is available to the decision maker. Outcomes are also known as states of nature.